Zacks Analyst Interview Highlights: Tessera, Micron and Infineon

Business Wire, June 24, 2008

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Ken Nagy, who discusses Tessera (Nasdaq: TSRA), Micron (NYSE: MU) and Infineon (NYSE: IFX).

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Some of your Buy recommendations in the semiconductor space aren't necessarily household names, are they?

Well, but that's because they do not have big market caps. But they all stand to benefit from the ongoing resurgence within the semiconductor upcycle.

Tessera's (Nasdaq: TSRA) advanced packaging technologies, for instance, have industry-wide application. Its licensing business has very attractive operating leverage characteristics. Also, the firm has won five major lawsuits and now receives royalties from all of the big four in the DRAM market: Samsung, Micron (NYSE: MU), Infineon (NYSE: IFX) and Hynix. The company has licensing agreements with Samsung and Hynix, which together have almost a 50% market share.

The stock is currently trading at a 13.7x multiple of our 2009 earnings estimate (P/E). Considering the company's market strength, we expect solid revenue and earnings growth to continue. The company receives royalty on approximately 80% of the DRAM market, which should be a catalyst going forward.

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